Crunch Case Study

The consequences of increasing credit period are more cash required to be invested in working capital and also losses due to increased bad debts.

In general, using external funds, i.e. debt or equity, to finance increasing growth is riskier to the corporation. When issuing debt the company needs to be certain to cover both the repayment of the principal and the interest payments on time (because if they do not this could cause them to have problems securing financing in the future). When issuing additional shares of stock (equity) the value of existing traded stock is diluted (in proportion) and as such the current ownership might lose control (and may even be voted out by shareholders if dilution is substantial enough). Furthermore, with both debt and equity financing, a fast growing company needs to be aware that payments to either may hamper future expansion because payments that need to be send out in the forms of dividends or interest cannot be retained and invested in future projects.

• Analysis of the target company—is the company a strategic fit as far as size, geographic location, business mix, operational capacity, financial strength and availability for takeover.

1. If you get it right, there can be many good reasons why buying an existing business could make good business sense. Remember though, that you will be taking on the legacy of the

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

This Crunchless Core program offers a different way from a guy with a ton of education and experience revolving around getting a stronger and healthier body. It offers a complete workout that helps you build a strong foundation and the increase your strength from the core of your

* Taking on debt gives the company the ability to use cash for projects and short term investments.

It has been a serious process for many organizations to raise capital which automatically has business and financial risks involved.

* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

* A broader capital base gives the company more access to credit which gives the company an option to venture into new business opportunities

how to finance a major acquisition. This question had led to contentious debate at the last board

However, the issuance of debt can have signalling effects for investors. Generally, when firms issue debt it signals to investors that the firm is in a good financial situation as the firm is able to undertake repayments of future interest.

Adding more debt into capital structure will reduce agency As more debts are added, agency cost of debt cost of equity as managers are left with less free cash flow Lowest agency cost of equity. would be further reduced. that could have been exploited for perk consumption. Since part of the earnings is paid to meet the debt repayments, dividends paid deceases comparing with actual 2011. But this is counter-balanced by increased earnings per share (EPS) as the shares outstanding is reduced Comparing with 20% leverage, dividend continues to decrease but EPS

Due to high investment in fixed asset the firm also need a high amount of debt in order to cover its expenses so the smooth run of business.

Raising Capital it one of the most important thing in any business. It's useless having a great idea and the right connections if you don't have the money to get it going. Without capital, your business can't get off the ground. You need it to buy products or materials, pay wages, have a secure cash flow and generally run your business on a day-to-day basis. The most common types of debt capital are bank loans, personal loans, bonds and credit card debt. When looking to grow, a company can raise funds by applying for a new loan or opening a line of credit. This type of funding is referred to as debt capital as it involves borrowing money under a contracted agreement to repay the funds at a later date. With the possible exception of